Nearly 29,000 jobs could go in Wales if austerity continues and the public sector faces another round of cuts, Plaid Cymru have warned ahead of next week’s autumn statement by the Chancellor.

Their prediction comes as Shadow Chancellor Ed Balls warned that “stagnant” wages and low pay were leading to “lower tax revenues and rising borrowing”.

Plaid is alarmed that the Office for Budget Responsibility anticipates a fall in public sector employment of around one million across the UK to take place between 2011 and 2019. The party estimates this could mean “there are still 28,800 public sector job losses in Wales to come”.

Jonathan Edwards, the party’s Treasury spokesman, said: “Employment in the private sector has grown considerably and much more rapidly than the loss in public sector jobs. However, the problem is that much of the employment growth has been in low wage jobs and under-employment.

“Given that many of these new jobs pay so little, this has not led to increased tax revenue in order to pay down the deficit.”

He added: “The plans of the Conservatives and Labour differ only slightly and an income Labour Government is committed to further deep cuts in public expenditure. Given that public services have already been cut the axe is likely to fall on welfare payments and in particular on those on low incomes or unemployed.”

Plaid is calling for the employee’s national insurance ceiling to go up from £7,956 to £10,000 to “make work worthwhile for the low paid”. It also wants the minimum wage to be raised to the level of the “living wage,” which is calculated to reflect the cost of living.

Shadow Chancellor Mr Balls stressed that Labour was prepared to take “difficult” decisions to balance the country’s books but insisted it would do it in a “fairer” way than the Conservatives.

He said: “Labour’s plan will balance the books and get the national debt falling as soon as possible in the next parliament. But we will do so in a fairer way by reversing that huge tax cut for millionaires.

“We will make difficult decisions like scrapping winter fuel payments for the richest 5% of pensioners, cutting ministers’ pay by 5% and capping child benefit rises at 1% for two years. And through our zero-based Review of every pound spent by government, we are showing how we will make different choices when money is tight.

“For example, we have already set out £250m of savings in the Home Office budget – including scrapping elected police and crime commissioners – better to protect frontline policing. Unlike the Tories – who have made £7bn of unfunded tax pledges – we have made no promises without saying where the money is coming from.

“I’m clear that our manifesto will have no commitments paid for by additional borrowing.”

Montgomeryshire Conservative MP Glyn Davies said the shift from public sector to private sector employment was likely to continue no matter which party wins power but that he wanted to see high-quality jobs in Wales.

He said there had been a “very significant increase in private sector employment – so much so that unemployment levels have fallen right across Wales”.

Stressing the need for economic prudence, he said: “Government just can’t carry on spending money and increasing the national debt at the massive rate it’s increasing. It’s got to bring it under it control... In the longer-term there’s no earthly reason at all why the jobs in the private sector should be any poorer paid than in the public sector.”